For much of 2017, mortgage rates have remained at historically low levels, which has helped those on each tier of the ladder – from first-time buyers all the way through to buy to let landlords and investors expanding their property portfolios – to secure a more affordable mortgage.
Inflation on the up
Inflation in the UK has continued to steadily rise throughout 2017. As measured by the Consumer Prices Index, inflation has risen from between 1.5% – 2% at the start of the year to break the 3% barrier in recent months – a level it hasn’t reached since April 2012, according to the mainstream media.
Therefore, after a decade of record low interest rates, the Bank of England’s Mark Carney raised the official bank rate from 0.25% to 0.5% earlier this month in a bid to tackle rising inflation head on; this signified the first rate rise since July 2007.
What does this mean for mortgages?
Borrowers might end up paying slightly higher repayments to their mortgage, as many lenders choose to pass the increased cost of the interest rate rise on to the consumer.
However, we at the Mortgage Hub know that while these rises have made for disappointing reading for some – lenders are incredibly competitive, particularly with fixed-rate deals, and will likely become more so in light of the change.
Additionally, to put these rises into context, we published this example earlier this year:
If you have a 25 year repayment mortgage and your rate raised by 0.25%, the increase in payments would be approximately as follows:
£100,000 mortgage – £10 per month increase
£150,000 mortgage – £16 per month increase
£200,000 mortgage – £22 per month increase
Arguably, there has never been a more important time to work with an independent mortgage advisor to secure the best deal (and interest rate) possible. With our expertise and ability to provide impartial mortgage advice, we are ideally positioned to help secure the best rate and deal to suit your needs.
A Stable Property Market
The Scottish property market has weathered 2017 fantastically well, with prices inching up and many wishful buyers competing on available stock. It was a particularly good year for East Renfrewshire and East Dunbartonshire property markets who have been identified as perfect investment spots, expected to show over 20% price growth in the next 5 years.
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.